Making Cents: Have strategy when applying for insurance

If you are thinking about applying for life or long-term care insurance in the near future, you should be aware of some underwriting idiosyncrasies and procedures.

John P. Napolitano

If you are thinking about applying for life or long-term care insurance in the near future, you should be aware of some underwriting idiosyncrasies and procedures.

If your application is imminent, it may be best to avoid any regularly scheduled doctor appointments until after the underwriting process is completed. Of course, if something is radically wrong or you are in the middle of treatment for a problem, keep your appointment.

But for regular appointments with no urgency in today's cover-your-butt world, your doctor is likely to write down just about any comments that you say about how you are feeling. This sounds ridiculous, but if you tell your doctor that you've been having trouble sleeping or that you are depressed over anything happening in your life, this is likely to make it into your medical records and raise another question by the insurance underwriters.

I have a client whose spouse made him ask the doctor if anything could be done about his snoring. Of course, the doctor recommended a sleep test, and the sleep center advised the client that he has severe sleep apnea and needs to sleep using a continuous positive airway pressure machine. This may have stopped the snoring, and maybe will save his life some night - but it also makes him uninsurable for the moment.

Smoking is another issue. The price difference between a standard issue and a smoker rate can be huge. So if you are waiting to apply until you quit - make sure that you really quit. I wouldn't let the smoker rate be your reason for not getting insurance, but you may surely use the increased premium as motivation to quit. You can reapply after one year to get non-smoker rates if you qualify.

If you own insurance that was bought many years ago when you were heavier, a smoker or after some sort of health event, you may get a better rate today. Insurance companies will sometimes offer their best rates to people who survived a health scare or had a major change in lifestyle for the better.

The applications are detailed, and there is typically a request sent to your doctor for a complete copy of your medical records. Don't stretch the truth or omit material health issues you've faced in the past. Not only will it come through on your medical records, but you've now alerted the underwriter that you may be forgetful or have a tendency to stretch the truth. That will only cause them to dig deeper on every little issue looking for verification to back up your answers.

John P. Napolitano is the CEO of U.S. Wealth Management in Braintree, Mass. He may be reached at jnap@uswealthcompanies.com.